SingTel's bid for Optus a part of regional strategy
Well, maybe ... active Asian telco SingTel is hopeful of acquiring Optus, but wants to avoid a bidding war with Vodafone. Photo: Peter Morris
By Kevin Morrison
Singapore Telecommunications (SingTel) claims it would still have sufficient financial firepower to make further acquisitions in the Asia-Pacific region if it won control of Cable & Wireless Optus.
Optus, which has a sharemarket value of about $15 billion, would represent SingTel's largest single investment outside its domestic market.
SingTel has been associated with most major corporate plays in the Asian telecom market in the past few years and has invested $US2.9 billion ($5.5 billion) so far in various joint ventures and companies in 20 countries.
"Our investment strategy will remain intact," Mr Ivan Tan, SingTel's director of corporate communications, said.
SingTel is believed to be looking at up to six acquisitions in Asia. Telecom analysts said these deals might include the Asian mobile interests of British Telecom and Deutsche Telekom that are understood to be up for sale.
Mr Tan would not comment whether SingTel would make a pre-emptive strike at Optus through an on-market offer in an effort to scuttle a rival bid by Vodafone Pacific, which is awaiting regulatory approval for its proposal to merge its mobile operations with those of Optus.
But he did say SingTel wanted to avoid a bidding war with Vodafone or Telecom Corp of New Zealand, which is considered only an outside chance to acquire Optus.
Mr Tan said SingTel was comfortable with the fact that Australia would represent its largest offshore operation if it acquired Optus.
"Optus is an opportunity. We look at opportunities in the region all the time, and, as you know, some markets in Asia are closed, so it is difficult for us to do deals in those markets. But we see Australia as an important market in the region and it is one of the largest destinations of traffic from Singapore," he said.
Mr Tan said there was no issue between SingTel and Optus's 52.5 per cent shareholder Cable & Wireless plc following last year's talks with the British carrier to acquire its interests in Hong Kong Telecom, which was eventually acquired by Hong Kong entrepreneur Mr Richard Li's Pacific Century CyberWorks (PCCW).
One source close to SingTel said: "I think they [Cable & Wireless plc] saw the errors of their ways, and would have preferred SingTel's money."
C&W accepted a mixture of cash and scrip for Hong Kong Telecom and has seen the value of its remaining 15 per cent stake in PCCW fall by 80 per cent.
SingTel had partnered Mr Rupert Murdoch's News Corp for the tilt at Hong Kong Telecom. However, Mr Tan said it was too early to say whether SingTel would include a partner in its effort to acquire Optus.
He said if SingTel did not acquire Optus it did not mean it would not be a player in the Australian mobile market. SingTel has said that it would like to acquire third generation (3G) mobile phone spectrum in Australia. "Buying Optus is one way of acquiring 3G spectrum. If we don't get it, there may be other ways."
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